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Ladies and gentlemen, good day, and welcome to the IFGL Refractories Limited Q3 FY '22 Earnings Conference Call.This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Navin Agarwal, Head of Institutional Equities at SKP Securities Limited. Thank you, and over to you, sir.
Good afternoon, ladies and gentlemen. It's my pleasure to welcome you on behalf of IFGL Refractories Limited and SKP Securities to this financial results conference. We have with us Mr. James McIntosh, Managing Director; and Mr. Kamal Sarda, Director and CEO. We will have the opening remarks from Mr. Sarda, followed by Q&A session. Thank you, and over to you, Mr. Sarda.
Thank you. Good evening, ladies and gentlemen. Thank you for joining us on the IFGL Refractories Limited Q3 FY '22 Earnings Conference Call. I hope you and everyone around you is safe and in good health. Along with me on the call for the first time, we have Mr. James McIntosh, our Managing Director. James has been appointed as a Managing Director in September. Before becoming Managing Director, he was our President of our U.S. subsidiary, El Ceramics and MCI. Also on the call, we have [ SGR ] Investor Relations advisers. We have uploaded the results and presentation on the stock exchange, and I hope everyone had a chance to go through the same. I would now request Mr. James McIntosh to give a brief overview. Over to you, James.
Thank you, Kamal. Good evening, everyone. It's a pleasure for me to interact with you all for the first time.Let's now share with you the business highlights for the quarter. As we all know, I mean, steel is one of the most recyclable materials in existence. And here in India, our domestic steel production has witnessed very strong demand growth in the past few years, which will continue for the long term. And in support of this statement, I think one of the most important metrics is the per capita steel consumption for India, which is 34% of the world's average and only 14% of China average. We have also, in recent times, seen a very strong balance as many of the world economies bring back to normal after the last 1.5 years of being impacted by the COVID-19 pandemic. Again, you all know that refractories are a key product used in the steelmaking process. And therefore, we have also witnessed strong demand in our products worldwide. However, at the same time, challenges to the supply chains have caused significant escalation in our cost of raw materials and services throughout the world. This has led us into a situation we were compelled to increase pricing for our products and services to maintain our position relative to these unprecedented increases. Due to the strong relationships we enjoy with our customers, we've got great support worldwide. And I think all of the price increases that we have requested have been granted by the customers, which is a good situation to be in. We would point out that in all of these cases, there is a time lag, which exists between the impact of cost increases to the company, the realization of the actions that are required by the company and the actions that we take. And thus, although our revenue increased on a stand-alone as well as a consolidated level, as you can see in the figures, our profitability was affected on account of these increased expenses. Some countries are fair better than us. We will see a normalization of our profitability levels in the coming months as the price realization that we've requested from the customer catches up the cost. Increase in the operating expenses were higher in the overseas subsidiaries as compared to our domestic business to break our global logistics element and their business cycles. Hence, the negative impact on profitability was higher in those subsidiaries as compared to the domestic business.So to recap, we see a continuing growth in our revenue with an improvement in net income during the coming months and beyond. Well, first, let me now hand over to Mr. Kamal Sarda for his comments.
Thank you, James. Let me give you a short brief on the CapEx. In FY '23, we plan to spend about INR 10 crores in our Odisha plant and also in our Kandla plant. At Visakhapatnam, the Phase 1 has become -- where we have already announced commercial production. Phase II expansion, we are talking of spending about INR 20 crores, and this should be completed by FY '23. Our focus remains to complete this CapEx and projects in a time bound manner and continue ramping up our existing capacities. We expect the demand for refractories to be steady and growing with the continuous unlocking of the economy. With the enhanced capacities and new product capabilities, we expect to improve the scale of the business, which will lead to scale benefit and operating cycle playing out in the long term of the company. Let me give you a brief of the financial highlights. On a stand-alone basis, the total income increased by 8% year-on-year to INR 196.5 crores. Sequentially, it was down by 2%. EBITDA was down by 19% to INR 35.1 crores. EBITDA margin stood at 17.9% compared to 23.8% in Q3 corresponding quarters. However, it increased from Q2 FY '22 margin of 17.1%. PAT was also down by 29%. On the consolidated financials, our international -- which includes our international subsidiaries in The U.S., Europe, the total consolidated income increased by 6% year-on-year to about INR 317 crores. Consolidated EBITDA was down by 34%, and consolidated EBITDA margins were at 12.4% in quarter 3 FY '22 as compared to 19.9% quarter 3 FY '21. PAT was also sequentially down. With respect to the liquidity positions, we remain net debt-free with a very strong cash balance in our balance sheet. Cash balance stood at about INR 267 crores as of December 2021 on a consolidated level. I think I now leave for any question and answers, both Jim and I will be happy to answer. Thank you.
[Operator Instructions] The first question is from the line of Subham Agarwal from Aequitas India.
Sir, my first question is slightly at the macro end. So if we see the Chinese production of steel, which is going down year-on-year and they have already mentioned that they can reduce substantially the steel production this year. What I wanted to understand in this context is how does the refractory industry gets impacted because of the Chinese refractory payers? So there is a hypothesis which says that there may be a huge amount of spare capacity in Chinese player. And because this is not a high power intensive company, they may dump product in various other countries. So I wanted to note, given in context that we -- our 60% of revenue is global, so how does it impact us? And your views will be appreciated around it.
Jim?
I think that the Chinese refractory companies have been very aggressive for many years in the global scale certainly and most of our markets are of Chinese refractory suppliers. Our product area, we have a very great advantage at the moment on the performance side of the products. Our objective for the future is to look at ways that we can increase our technology and increase the performance of the products in the future, obviously to come by that. But generally speaking, I would say that the Chinese suppliers are already very, very strong worldwide. I don't think the effect of the Chinese market will be such that it's going to make a major effect on the global scale. I don't -- Kamal, what's your thoughts?
Yes. No, I agree with you, Jim. So on the power front, what you mentioned, it's not so power intensive as far as refractories because the industry is concerned. But the real impact would be on the raw material side, which I think will be impacting the refractory industry both worldwide, not only in China but also worldwide. But the situation has eased up over the last few months. So the situation is not that bad as it used to be projected in the month of October, November last year. So the situation has eased up. On the Chinese competition, I don't -- we don't think that, that's a competition which we should worry about, that has been there for ages now, and that will continue to remain there. It's only the technology front, which will make us different.
Fair enough. So do we have any ADD in U.S. and Europe against Chinese import as of now? .
You're talking of antidumping duty?
Yes.
Yes. Jim, you -- okay.
Yes, they do. Yes.
Yeah, they do.
In America.
Okay. Okay. Fair enough. And secondly, coming to the raw material part, so how much of our raw material do we import from China?
On a quantity terms, it would be around 50%.
60%?
50%.
Okay. And so the realization, as you mentioned in the opening remarks, is dependent upon the contract with your customers. So what is the time lag between increase in raw material price and your negotiation with customers and in the current environment?
It depends on a contract-by-contract basis.
Okay. And how long is the contract for typically?
It depends on customers and countries. They're all different. Because it ranges between 3 months to 1 year. Yes, so that's how the range is. So that's how -- see, the entire -- any new pricing strategy would happen in the new contract only, in that we were mentioning about.
Okay. No, why I'm asking this because one of our competitors reported increase in margin where -- as our stand-alone margin remained constant. So I wanted to understand when can we increase our realization to match up with the competition.
So if you look at the competition, they had one-off, I don't know whether you've gone through a report by one of the analyst groups very recently. So they had -- they had some one-off transaction. I would not say transaction. One of income which has been booked there in this quarter. I don't know whether that was an impact of only this quarter or cumulative impact from beginning to the end. But that's one of the reasons. I think that's the only thing which I can know of. But having said that, there has always been slightly on a higher margin than ours.
Yes. But our December consolidated margin was around 11.4% EBITDA level. So -- and you have guided for somewhere around 13%, 14%. So when can we achieve that level of margin?
It should be soon, I think there -- as our Managing Director mentioned that the normalcy should soon come when we have all the price increases in place and the cost becomes normal.
Fair enough. Now coming to the goodwill part. So the process, as we know, is in NCLT, where have we reached? And when can this transaction take place?
It will take some more time. I am unable to give any kind of time frame. There are some discussions going on with few agencies. It may take some time.
But this will happen only in FY '23, right?
Yes, yes, yes. Even if you file in this quarter, it will not happen in this quarter.
And regarding the goodwill of subsidiary, we had taken, I think, last year FY '20, INR 20 crores write-off. So do we expect any further write-off in the subsidiary goodwill part?
No.
Okay. And lastly, on the capacity part. Given that we are doing Phase II of Vizag and recently commissioned Phase 1 also and also we are doing debottlenecking. So out of the entire CapEx that we have done recently and that we are supposed to do, what is the incremental revenue that we expect out of this in absolute terms?
See, it will be very difficult for me to quantify that right now. But as I -- I think I had mentioned in my previous calls, that on a greenfield project, you can look at a 3x, 3.5x; on a brownfield project, you can always look at 5x to 6x.
Okay. Okay. Lastly, on the European and American subsidiary, what was the exact reason for reporting an EBIT level loss in American subsidiary and when can we expect the normalcy to return?
In America, we were badly impacted by raw materials and all of the price increases have already been agreed with the customers. We fully expect to see a return in the next quarter.
Next quarter, that is Q4, right?
Yes.
Next question is from the line of Abhisar Jain from Monarch AIF.
Sir, just wanted to understand the issues that we might be facing at EI Ceramics, because FY '22, till date has been a very rough year at EI, whereas generally EI Ceramics has been one of our best overseas subsidiaries with margins in the mid-teen range generally, between 13% to 15% if we look at a long-term track record of that subsidiary. So I believe there were some operational issues. And if you can mention that whether those are addressed and by when EI can return to its normal level of profitability?
Yes. I think as the country was affected definitely by COVID, in some countries, there were certain programs, which were initiated by the government to help during the furloughing period of companies. We never furloughed in America at all. But even so there were programs existing for the general employee base where I think it's fair to say that the employee base available in The United States has reduced and many people have decided not to return to the workplace following the period that they've been under the government schemes. And so there was some areas where certainly on the manpower side, we were affected in The U.S. We were heavily affected on the raw material side. And then on the price increase side, no. I feel that now that we have these in place, we'll see that return again.That was first and I was just affected by the global situation with raw materials and freight is like a perfect storm almost.
Right. Okay. I understand. And sir, so in that context, given that some issues still persist, I mean, in terms of, I'm not sure, but about the employee availability that you talked about in America and also the freight issues, I think that many of them are...
No, I think they are not -- they don't exist. I mean, generally, I would say that as I said earlier on, we fully expect that the next quarter will be returning back to the normal position.
Okay. Sure. That's good to know, sir. And then going forward for the next few years, do you expect EI Ceramics to be returning to its normalized margin level that we used to do earlier through the last decade? .
Yes. Absolutely.
Okay, sure. Sir, the second thing I wanted to confirm the comment that is on the Vizag plant. So while we have announced commercial start and the trial runs, et cetera, are going on. Just wanted to confirm that did we have any revenues from Vizag in Q3? And when do we see the revenues from Vizag in the P&L?
The dispatches from Vizag continues. It's not -- so as of today, there is a consolidated order at IFGL level. So all the orders are built through our Kalunga plant because of GST issues. So we have not taken any direct order. So all these billings are happening from there. So there is sales going on. There's sales going on. Gradually at a later date, we may shift all the billings with because -- at the customer level commercial issues happen. So we don't want to complicate issues. So we are happy billing it from one place. So yes, sales is on a consolidated basis between Vizag and Kalunga.
Right, sir. Okay. Understood. And sir, so in that context, only since we have new plant adviser come up and plus we have been expanding at Kandla and Odisha also in the last 2 years also, apart from whatever you indicated that you will be doing further CapEx in '23, but we've been doing the CapEx at those 2 locations in the last 2 years also. So given that, sir, where do you see the domestic revenue trajectory given that domestic demand remains quite strong from the steel industry, I believe?
I think we will grow with the trajectory only. We'll grow with whatever new capacity will get added in India. We grow with that. And definitely, our target is to grow faster than that.
Okay. Okay. And sir, just last question on this price increase that was part of your opening remarks. So sir, any indication of the quantum that we had to take? And did we also get some hike or some compensation of the freight part because one of our peers has been able to get. I understand they may have been able to benefit from their MNC parentage, but does our price hikes also budget for some bit of freight element because that's been hitting us quite badly, right?
Yes, yes. So the -- definitely, the price hike takes into account the raw material prices, which are hiked on a basic level as well as their ocean freight. So like our competitors has specifically mentioned to you because they have got -- they import a lot of material and sell directly to the customer. So there is a one-on-one, the freight impact. But in our case, we don't have that kind of thing. So it is -- the prices included -- includes the ocean freight and price increase impact.
Right. So I just wanted to confirm that the quantum of price hike is any indication of a range? .
See, it depends on customer to customer, I think, ranging from 10%, 12% to about 22%, 23% also we have got.
The next question is from the line of Gokul Maheshwari from Awriga Capital.
Sir, could you comment on the demand trends in the near term from the steel industry. Are you seeing strong demand continuing from your customers?
Jim, will you take this?
Yes. I mean there's no indication that the steel industry is not going to continue its growth trend. I mean, if you look at the steel in the last 5 years, I think the annual growth rate is somewhere in the region of 4% or 5%, thereabouts. And there's no reason to believe that there's going to be any different there. I mean, obviously, we've seen a massive increase in demand this year relative to last year just by virtue of the fact that many countries were affected through the COVID situation. And so -- but even if you look at the difference between 2019 and 2022 -- '21, sorry, you've still got a growth there. So I would say that the demand will continue to grow, especially in India. I think everybody would agree in any of the [ acute service ] there is, India is clearly identified -- rightly identified as one of the major growth areas in the world [indiscernible] and we will continue.
Okay. With respect to the competition in the domestic industry, are you seeing any changes in the local competition? Anyone who is getting impressive or easing of competition or it remains broadly the same?
So the competition scenario remains the same. There is nothing -- no major changes happening here.
Okay. Great. And just lastly, on the -- I just wanted to reconfirm. You mentioned about the RM pressure easing off and the price hikes which have been taken will help you allow restore your margins, which you've been doing in the past. So it's more like a blip right now.
No, no, I don't think...
I don't remember saying the raw material would ease off. The raw material price increases. We can't say that.
Yes, we cannot say that.
Okay. Because I took the -- the comment was that...
You got a misinterpretation.
Yes. Because I heard saying that the prices have eased off since October, November, what we were a few months back.
No, no, that was on a different context, I'll take that.
Okay, fine. So this raw material pressure still continues, but you're taking corresponding price hikes as the contract renewals are coming on?
Yes, the raw material pressures are still there. So the corresponding customers are agreeing to give price increases. That's what we -- what we said so the raw material pressure is still there. It is not there -- there is no more easing of issues.
Next question is from the line of [indiscernible].
Couple of question is, sir, I have been reading that raw material sourcing has been difficult because of the supply chain disruption has increased. So what is your sense in this, is the industry consolidated -- consolidating or can we increase our market share going forward like the way we have done in about 5 years?
I honestly didn't get your question. What do you want to know, sorry?
Sir, I'm asking that raw material sourcing has become difficult after the pandemic or because of supply chain disruption. So is the industry consolidating at the macro level in our country is what I wanted to gain? And can we gain market share going forward like we have done in last 5 years?
Okay. On the raw material situation, I don't think there is a pressure. There's only a pressure on the logistics part. So availability is still there. Maybe the logistics is getting delayed. The shipment time from China to India become -- when it used to be about 20, 25, 30 days, now it has gone to 35, 40, 45 days. So we are taking care by keeping additional stocks. Okay. So that's there.On the consolidation, I think it's a continuous process. I don't know what more consolidation will happen. I don't have any news as such.
Yes. I would agree, Kamal, I think that supply and demand is obviously what causes prices to significantly change. And when you have a situation where there is a lack of supply, for whatever reason, then the price sensitivities are going to occur in that particular product area and certainly in raw materials, and it's been impacted quite heavily. Hopefully, as freight starts to release in the coming quarters, then we will see a definite -- I don't get the feeling that there is any end in sight there with regard to changes in the freight. And therefore, it would be very difficult for someone to indicate that the price of the cost situation with regard to raw materials is going to change significantly in the coming months.
Okay. Sir, I also wanted to ask that we've seen on using the recycled raw material tool. So sir, what is the margin benefit that will get and how is the availability scenario there? Is it -- like do we have access to it or all countries have access to it?
See. Recycling materials are available, but definitely, as we cannot talk of the margin impact, but that's a part of the cost structure built into the product. But recycled materials are available. I'm not saying you're getting in a free way, but then you have to do some processing -- in-house processing and then recycle it. But then yes, we can get some recycled materials.
Okay. Sir, also in terms of outlook price for next 1 or 2 years, we are seeing that steel companies are doing a lot of [indiscernible] capital expenditure in our country or maybe investment cycles. So how do you see the outlook from like 1, 2 years going forward for refractories company? Like what's you take on it?
Personally, the market seems to be very good. The government, you know this budget, they have announced huge capital expenditures, one of the highest ever. So I think the market seems to be very good for the user industry and then resultant -- that the refractory industry will also get the benefit. I don't think in the next 1 or 2 years, we should -- in fact, we should be happy that the government is spending so much, and we have a huge demand of steel coming up. In fact, the government still continues to remain buoyant on the steel capacity expansions as per the national steel policy. So I think industry should look for good growth.
And I think from IFGL's point of view, I mean we have forum groups, which are currently analyzing and looking at ways we can expand and grow in the future. I mean, obviously, there are many factors that have to be taken into account. And in coming quarters, once we have those plans finalized, we can announce them and we certainly will let you know.
Okay. Sir, I think I missed the point in the beginning. So what could be the percentage of raw material increase from quarter-on-quarter? Like if you can -- raw material price increase...
I don't think we mentioned that. We have not mentioned that. We were not calculated the price impact and as such it's very difficult. Yes, it's very difficult to assess that.
The next question is from the line of [indiscernible] Capital.
Yes, sir, my question has been answered. Thank you.
Next question is from the line of Sanjay from Ratnabali Capital.
Sir, what is your percentage of our high end refractories in our total basket of products?
What do you mean by high end refractories, I think if you ask us, I think our products -- all the products are high end refractories.
But if we -- so if we compare this quarter's performance, Vesuvius [indiscernible] RHI Magnesita. So they have posted some fabulous set of numbers with a significant expansion in the operating margins. But what are we lagging for this quarter, sir? .
I think I answered in my previous thing.
Sir, if you can kindly come again, so I might have missed out or joined the call late, sir.
We really don't know. As I mentioned that they always had a slightly higher margin than us. And they -- if you look at one of the analysts report, which has come up after their results, they have got some freight increased, freight surcharge increase booked in this quarter, a huge amount. I don't recollect what is the amount, and that could have resulted in the higher margins. I really don't know. We don't know about what our competitor does. But going by the analyst report, it seems that they've got onetime income for other stuff.
Great. Sir, if I'm not wrong, so we import basically -- yes, import basically 30% of all our refractory needs as on date, which is [ INR 50,000-odd ] crores. So do you feel like going forward, there is an opportunity in India like we can shift on from that import to manufacturing in India as in Make in India theme?
Yes. I don't -- but in our range of products, there is hardly an import.
[Operator Instructions] The next question is from the line of Sahil Sanghvi from Monarch Networth Capital.
My call is specifically to Mr. James McIntosh. Sir, I would like to just understand that you coming up as an MD for IFGL Refractories, what are the few areas where you would like to target? What are the few specific targets you have now that you take over officially? Specifically, if you can give some around product-wise or customer-wise or technology-wise. So what are the few goals that you're looking for?
Yes. I think that at the moment we have a lot of that discussions going regarding the company and the future direction for the company. Obviously, in the domestic market for India, IFGL's got a very proud position. I mean we are 1 of the first refractory manufacturers in India. We don't know [ if people aren't ]. It's a very exciting situation to be in, Kalunga being the main plant for IFGL. Kandla has really come on well since we started. And we've got -- as you can see from the CapEx plans there, we'll get big plans for expansion in Kandla. Visakhapatnam, we are currently looking at because it's a phased expansion. We're currently looking at the next phase of expansion there in the next basket of products that we'd like to move into. We hope to make the decisions on those product areas over the coming months and start to move forward on that. And then the Phase III, discussion has started also with regard to identifying the different market areas and the dynamics in the markets available for us. But one area that for sure in the company that we were already identified as maybe a move into higher technology products and what that would require for us to do as a company. I mean IFGL's got a very sound business model. If we have a look at the structure of where IFGL fits and the technology scale, we could say that there's some possibility there for us to move up the scale we've at into higher performance products and higher profit products. And for that, we're currently identifying the requirements for the company. And again, as I said earlier on, in the coming months, we'll be able to announce these initiatives and programs once we're finalized, but we're still going through management discussions at the moment.
Okay. Okay. Got it. And secondly...
Certainly, just to answer your question, I mean, if you keep your eyes for the next meeting and also the next 2 meetings, I would say that there's probably going to be further announcements in terms of new investments for the company.
Okay. Okay. So my second question is related to the cash that we have in our balance sheet. So are we looking at some kind of oppositions, also? Or do we also aim to give out more returns to our shareholders in terms of buybacks or more dividends? I mean, are we exploring those areas?
Yes. I think that's -- definitely it's a great question. And I mean certainly for the company, it's one area that we are discussing again at great length because there are -- for sure, I mean, it's always an area for companies to determine the way we look at expanding our own operations or do we look at acquisitions. And I would say that we have -- at the moment I agree for people who are looking into the expansion of the company and for sure using the cash balance that we enjoy, it's something that is going to be certainly a very strong point for IFGL. I think if we look around in different market areas, we've already identified several areas that we could possibly move into. But again, these have to be discussed and finalized and analyzed through our own company before we announce any moves.
[Operator Instructions] The next question is from the line of [ Saket Kapoor from Kapoor & Company].
Sir, if you could summarize what the discussion has already been, this could be treated as a one-off quarter wherein the margins lift for our business outside India. Will it be -- will it return to normalcy in the next quarter itself with the revision in the finished product prices? Is that assessment correct, sir?
So I think, yes, in the quarter 4, we are looking at a normal situation.
Okay. And sir, coming to the margin profile. When we look at the margin profile for our businesses outside India, the Europe and the Americas, the profile is significantly lower than what we are doing for India. So what are the key reasons there for these margins? And do these global players also have similar margins, the ones who are operating -- competing with you in Europe and America? Of the same margin profile? Or if you could address the extent of it, sir?
So I think global players also will have -- will have a lower margin than what they have in India. If we look at their results compared to Indian results and overseas results. In the overseas market, they are impacted by -- the raw material costs are higher there. The ocean freight impact as management had to mention is also higher. One of the other impacts compared to India is their manpower cost is significantly higher than India. Overall, the margin will be different than India. Plus, there will be impact of a product, the margins also depend on product to product. As in our case, EI Ceramics has a better margin than the other foreign subsidiaries. So that also depends on product to product also. But in overall situation, I think all the overseas companies, all the -- if you look at the multinational companies, their overseas operations, the margins would be significantly lower than their results in India.
Right, sir. And sir, if we look at the capacity utilization, there was domestically and also in other geographies of the world. How -- for our company, how have they fared up for this quarter and for the 9 months average?
It is very similar to the last quarter.
Yes. In percentage terms, sir, can you quantify it for...
Ranging from company to company, product to product, we have various product where you can say anywhere between 55% to 75%, 80%.
Okay, sir. Actually, sir, what my question was that if we find that there is a proportion of fixed cost and the variable cost. So at what levels are we going to see incremental margins going to our bottom line?
Difficult to answer that question. That's a very, very difficult question.
Okay, sir. And sir, looking at the demand scenario, especially for India and also, sir, which I think so 2 plants, in 1 of the plants, I think of NINL and also in [indiscernible] and other plants are coming up, so do these plants with 1 million tonne and 3 million tonne capacity create any buoyancy in the respective market for the time being since these are the new capacities...
Any new capacity addition will add to the refractory consumption. We will definitely add to the refractory requirements. And we had been a supplier to NINL in the past before the [indiscernible].
Okay. So there any -- at their full capacity, what kind of increased volumes do we expect from a 1 million tonne plant [indiscernible] for the year?
Basically, it requires a lot of other refractories, which we don't make. There are a lot of refractories not that we can supply them all the refractories what they require. We can only supply them the flow control refractories what they require and that is what we were supplying. And in fact, we were -- this plant has been running -- limping for the last many years now. It never ran up from capacity as such. So I think we'll have to see when the plant comes to normalcy, what kind of requirement comes up. And mainly, they also had a scope for expansion. And the reason why Tata has bought it, that they will use this facility to expand there also. It's not for 1 million, I think they are talking about much more there.
Okay, sir. And sir, currently, if we take the profile of our domestic business, is it feasible for you to quantify what percentage is from the Tatas?
I think Tatas could be somewhere around 10% of our domestic sales. I just will figure it out for you...
I will take it out at [indiscernible] number.
[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Sarda for closing remarks. Over to you, sir.
Thank you, everyone, for participation. And it was, I think, a very good question-and-answer session. And I hope I've been able to answer most of your queries to your satisfaction. And thanks to our Managing Director for joining, and we look forward to all of your participation in the next call. For any queries if you have, you may contact SGA, our investor relations advisor. Thank you all, and have a good day.
Thank you.
Thank you very much, Mr. McIntosh and Mr. Sarda. Ladies and gentlemen, on behalf of SKP Securities Limited, that concludes today's conference. Thank you for joining us and you may now disconnect your lines.